SIDBI Commits ₹200 Crore Under Fund of Funds To 4 AIFs to Help Startup Funding

The Small Industries Development Bank of India (SIDBI) has committed Rs 200 crore under the Government of India’s Fund of Funds Scheme (FFS) to four alternative investment funds (AIFs) — Omnivore Partners India Fund 2, TVS Shriram Growth Fund 3, IQ Alpha III, and Capaleph Indian Millennium SME Fund, according to a tweet by SIDBI’s official twitter handle, made on Friday.

No further information has been dispelled by SIDBI; not even any official press release from either SIDBI or the Department of Industrial Policy and Promotion (DIPP).

In January 2016, The Government of India estabilished Fund of Funds Scheme (FFS) when in January 2016 the govt. announced it ambitious Startup Action Plan. The FFS was established with a corpus of Rs.10,000 crore, which is to be managed by SIDBI for contribution to various Alternative Investment Funds (AIFs).

This year in April, in an internal mismanage DIPP has blamed its fund manager SIDBI for slow pace of disbursement to startups. Thereafter in following month, DIPP has undertaken before a Parliamentary panel that it will not make any releases to fund manager SIDBI during FY-2018 and FY-2019, due to unspent balances and poor offtake under FFS scheme.

DIPP itself was criticized when a report by a Parliamentary Standing Committee on Commerce said that the DIPP could utilize only 0.4% of Rs 10 crore that were allocated to it for the promotion of ‘Start-Up India’ scheme in 2017-18.

SIDBI has so far committed about Rs 1,135 crore to 27 local venture capital funds (leaving the four recent ones) under the FFS scheme, of which Rs 141 crore —only about 11 per cent — has been disbursed to these funds till April 2018.
Sidbi had also committed Rs 200 crore under the scheme to three AIFs namely Bharat Innovation Fund, JM Financial Fund II and North Eastern Venture Fund in January this year. Earlier, Sidbi had backed funds such as Pi Ventures, Unicorn India Ventures Fund I, Ankur Capital Stellaris Fund, Menterra Social Impact Fund I and Endiya Seed Co-Creation Fund besides others.

Sidbi is also operating various other fund of funds programmes by investing in MSMEs and start-ups – India Aspiration Fund (IAF) launched formally by Finance Minister Arun Jaitley in August 2015, ASPIRE Fund focused on agri and rural enterprises launched by Jaitley for MSME in 2016, and Rs 200 crore on behalf of LIC.

In May of this year, Bangalore-based retail technology startup Mobisy received funding of Rs 24 crores led by SIDBI Venture Capital Limited (SVCL), a venture capital arm of SIDBI specializing direct and fund of funds.

Omnivore Partners had hit the first close of its second fund, Omnivore Partners India Fund 2, at $46 million with investments from KfW, Sidbi, the Dutch Good Growth Fund, The Rockefeller Foundation, Ceniarth, RBL Bank and the Sorenson Impact Foundation. Omnivore targets to raise a total of $75 million in the second fund and hopes to complete the fund raising by August, it announced on February.

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